What is the difference between a Property Bridging Loan (PBL) and a Development Finance Loan (DFL)?

A Property Bridging Loan is a short-term loan generally for a maximum of 12 months secured against property/land to allow a borrower to secure long term finance, enhance value or sell an asset. The loan to value (LTV) is calculated on the value of the security when the loan is made. Some bridging loans are provided to enable borrowers to enhance the value of an asset by securing planning or building on land before securing long term finance or selling but this potential enhanced value is not usually included in the LTV.

A Development Finance Loan is a loan to undertake a construction project. Unlike a bridging loan where the Loan to Value (LTV) is calculated on the current value of the security when the loan is made, for a DFL the LTV (LTGDV) is calculated against the future value, known as the Gross Development Value (GDV), of the security once the project is complete.

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